More and more companies are becoming aware of the need for detailed metrics to track supply chain performance, according to a recent study done by the Georgia Southern University and the University of Tennessee on issues in transportation and logistics.
“What we’re starting to see,” says [Karl Manrodt, Associate Professor at Georgia Southern], “is senior management … trying to understand what those metrics are and should be.” The desire to monitor one’s own performance, so prevalent in school, never really goes away. At the same time, “it’s important for us to communicate what’s critical … to customers and suppliers. Let’s manage to that.”
Unfortunately many supply chain teams struggle to access data in multiple sources and formats and do not have access to the latest business intelligence tools. Implementing a Performance Management solution that integrates with your supply chain visibility and trade compliance processes can give companies the insight to make better-informed strategic decisions and improve supply chain performance.
Management Dynamics has a Performance Management solution that offers several important capabilities:
A portal to schedule reports, alert users when new reports are available and to distribute polished deliverable documents.
A dashboard to provide a consolidated view of key performance indicators and reports along with extensive personalization options.
Over 80 standard reports are available across all supported modules to manage key metrics such as cycle time, trading partner performance, landed cost, and data quality. Users also have the ability to create their own customized reports.
A web-based reporting tool to perform ad-hoc queries and multi-dimensional analyses with the ability to drill to operational details. Reports can be quickly customized by dragging and dropping data, inserting calculations, and adding graphs.
A business intelligence platform for developing strategic reports, analytics, KPI metrics, scorecards and personal and corporate dashboards.
Ability to scorecard carrier performance, compare transit times, analyze pricing trends, and track the history of all transaction costs through an end-to-end audit capability.
To learn more about this solution, please visit our website.
For more details on the study, please read this article on SupplyChainBrain (includes a link to a video interview).
At a conference this month, General Motors VP of Global Vehicle Engineering Mark Reuss stressed the importance of developing and maintaining good relationships with suppliers. According to an article on ReliablePlant.com,
GM recently has taken several steps to improve supplier relationships, including revising its supplier cost reduction suggestion program to let suppliers keep a larger share of savings generated from cost reduction ideas that are implemented. In addition, GM recently announced that later this year, it will begin paying direct material suppliers weekly instead of monthly. This move will allow suppliers to better manage their cash flow and reduce the need to borrow money to run their businesses.
When an organization has healthy communication with their suppliers, they are better able to tap into the suppliers’ industry knowledge, and come up with new ideas for products, services, and ways things can be run more efficiently and cost-effectively. It is important to set up a collaborative two-way relationship that can deliver value to both parties.
Related to this, is the importance of establishing a way to measure supplier performance. (Curious about the distinction between supplier relationship management and supplier performance management? Check out my blog post from a few months ago on the subject.) Global supply chains are complex, inter-connected systems that must be managed by establishing key performance indicators, measuring the process, analyzing results and developing strategies to continuously improve performance.
Management Dynamics’ Performance Management solution integrates with our GTM solutions to access the wealth of operational data that is available in supply chain visibility and across key export, import and trade agreement processes which span from order to final delivery. Users across various functions can access Performance Management to run Web-reports or manage key metrics through scorecards.
According to the 14th Annual Third-Party Logistics Study, which was conducted by Capgemini Consulting, both shippers and 3PLs are reporting that their current IT provider is not giving them the tools they need to measure performance:
Nearly nine in ten shippers (88 percent) said that IT-based logistics services are important, but only 42 percent said they are satisfied with the capabilities of their provider. As a result of this IT capability gap, the study authors said, shipper respondents reported a lack of the key performance indicators, alerts and visibility required for an adaptive supply chain, and 3PLs reported similar difficulties in getting the data and commitment they need from shippers.
Global supply chains are complex, inter-connected systems that must be managed by establishing key performance indicators, measuring the process, analyzing results and developing strategies to continuously improve performance. Unfortunately many supply chain teams struggle to access data in multiple sources and formats and do not have access to the latest business intelligence tools.
Management Dynamics has a Performance Management solution that integrates with our Global Trade Management (GTM) solutions to access the wealth of operational data that is available in supply chain visibility and across key export, import and trade agreement processes which span from order to final delivery. Users across various functions can access Performance Management to run Web-reports or manage key metrics through scorecards.
Each department can then access their performance monitoring reports to manage service providers such as suppliers, forwarders, and brokers as well as manage critical process cycle times. By sharing operational data and inter-linking metrics across compliance, logistics and procurement domains, supply chain managers can make better data-driven decisions and manage cash-cash cycles.
Best-in-class companies have been able to realize the following benefits after implementing Performance Management:
Shift from tactical decision making to continuous improvement programs based on Lean principles
Restructure supply chain and proactively manage business partner SLAs
Access one aggregated source of cleansed data with all key dimensions
One technique to measure and improve upon supplier performance is the use of supplier scorecards. If used properly, scorecards can help companies to reduce vendor lead times, improve inventory management, maximize sell-through and reduce costs, and ultimately result in an improved bottom line and cash flow. Check out these tips from Supply Chain Management Review on designing and utilizing scorecards to improve performance: Unlocking Value through the Supplier Scorecard.
In this article from International Freighting Weekly, Nathan Pieri from Management Dynamics discusses some of the benefits shippers can realize by implementing a performance management software solution.
“It allows shippers to tightly manage performance, and certainly for some of the more forward-thinking managers this system captures their imagination.”
According to a study released by UK supply chain consulting firm State of Flux earlier this month, many companies are failing to see a destinction between supplier performance and supplier relationships. Out of 223 procurement, supply chain, and supplier relationship managers surveyed, 62% said that they did not have an accepted definition of supplier relationship management at their company. To set the record straight, according to State of Flux supplier performance management (SPM) is about how well suppliers are doing what they initially said they would do in a contract. Supplier relationship management (SRM) refers to a collaborative, two-way relationship that can deliver value to both parties.
Clearly, both of these things are important for the success of any company. Suppliers are a crucial part of production for any business and it’s important to ensure they are operating up to standard. If not, it could lead to major problems. Meanwhile, it’s important for organizations to have healthy communication with their suppliers in order to tap into their industry knowledge, and come up with new ideas for products, services, and ways things can be run more efficiently and cost-effectively.
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